Hyderabad Metro Rail gets Rs 1,458 crore viable gap funding

NEW DELHI: A government appointed committee headed by Department of Economic Affairs (DEA) Secretary Arvind Mayaram today approved viability gap funding (VGF) of Rs 1,458 crore for development of Hyderabad Metro Rail.

"The Empowered Committee headed by DEA Secretary has accorded final approval for viability gap funding of Rs 1,458 crore (12.35 per cent of total project cost of Rs 11,814 crore) under the VFG scheme to the project from Government of Andhra Pradesh for development of Hyderabad Metro Rail on DBFOT (Toll) basis," the Finance Ministry said in a statement.

VGF is typically provided in competitively bid projects. Under VGF, the central government meets up to 20 per cent of capital cost of a project being implemented in public private partnership (PPP) mode by a central ministry, state government, statutory entity or a local body.

The state government, sponsoring ministry or the project authority can pitch in with another 20 per cent of the project cost to make the projects even more attractive for the investors.